Resilient NdFeB magnet recycling under the impacts of COVID-19 pandemic: Stochastic programming and Benders decomposition

Neodymium-iron-boron (NdFeB) magnets are the most powerful magnets per unit volume sold in the commercial market. Despite the increasing demand for clean energy applications such as electric vehicles and wind turbines, disruptive events including the COVID-19 pandemic have caused significant uncertainties in the supply and demand for NdFeB magnets. Therefore, this study aims to alleviate the risk of supply shortage for NdFeB magnets and the containing critical materials, rare-earth elements (REEs), through the development of a resilient reverse supply chain and logistics network design. We develop scenarios to model the unique impact of the COVID-19 pandemic on the proposed business, incorporating both disruption intensity and recovery rate. We formulate a chance-constrained two-stage stochastic programming model to maximize the profit while guaranteeing the network resiliency against disruption risks. To solve the problem in large-scale instances, we develop an efficient Benders decomposition algorithm that reduces the computational time by 98.5% on average compared to the default CPLEX algorithm. When applied to the United States, the model suggests the optimal facility locations, processing capacities, inventory levels, and material flows for NdFeB magnet recyclers that could meet 99.7% of the demand. To the best of our knowledge, this study is the first to incorporate the impacts of the COVID-19 pandemic to design a resilient NdFeB magnet recycling supply chain and logistics network, leveraging risk-averse stochastic programming.

Automated summary

This study aims to alleviate the risk of supply shortage for NdFeB magnets and rare-earth elements through the development of a resilient reverse supply chain and logistics network design, incorporating the unique impact of the COVID-19 pandemic and leveraging risk-averse stochastic programming. The proposed model provides optimal facility locations, processing capacities, inventory levels, and material flows for NdFeB magnet recyclers in the United States to meet 99.7% of the demand. The development of an efficient Benders decomposition algorithm significantly reduces computational time compared to the default CPLEX algorithm.